Stocks erase gains after Fed hikes rates for third time this year

Stocks gave up afternoon gains after the Federal Reserve moved, as expected, to increase interest rates.

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The decision came after the Federal Open Market Committee wrapped up a two-day meeting.

The Dow Jones Industrial Average lost 106.93 points, or 0.4 percent, closing at 26,385.28. The broader S&P 500 fell 9.59 points, or 0.3 percent, to 2,905.97. The Nasdaq Composite dropped 17.1 points, or 0.2 percent, to 7,990.37.

Investors and economists also digested comments Fed Chairman Jerome Powell, who addressed questions over the economic impact of new import tariffs. Businesses have raised concerns about the global trade dispute, but tariffs have yet to drag on the economy overall, he said.

Economic data released Wednesday included August new home sales, which were up by 3.5 percent versus July's 1.6 percent drop. Housing supply retreated slightly, to 6.1 months' worth of supply at the current pace of sales versus July's 6.2 months. The August median sale price was $320,2000, up 1.9 percent from August 2017.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES28015.06+337.27+1.22%
SP500S&P 5003145.91+28.48+0.91%
I:COMPNASDAQ COMPOSITE INDEX8656.528802+85.83+1.00%

In company news, Nike shares fell despite a strong fiscal first quarter report that saw the apparel giant top Wall Street’s expectations for both quarterly earnings and revenue. Gross margin increased 60 basis points to 44.2 percent, but fell short of Wall Street’s expectations.

TickerSecurityLastChangeChange %
NKENIKE INC.97.00+1.21+1.26%

Chinese stocks extended their recovery to hit eight-week highs as trade concerns ease.

The Shanghai composite  rose 0.9 percent.

Hong Kong’s Hang Seng finished the session with a gain of 1.2 percent.

Japan’s Nikkei ended the day up 0.39 percent.

In Europe, stocks were mixed.

FOX Business' Leia Klingel and Matthew Rocco contributed to this article.